Appropriations
The Senate Appropriations Committee approved S 2825 its FY 2005 VA-HUD Appropriations bill. As previously reported:
The committee report (S. Report 108-353) includes language which strongly rejects the Flexible Voucher Program (tenant-based Section 8 block grant) proposed by the Administration.
The Committee delivered a scathing indictment of the FVP. The Committee noted the FVP fails because the proposal is inadequately funded, eliminates the current requirement to target 75% of all vouchers to extremely low income families, and would allow PHAs to set maximum payment standards that would likely result in higher rent burdens for families or reconcentration of the poorest families in the poorest neighborhoods.
Funds the Section 8 Housing Certificate Fund at $20.7 billion – $1.4 billion above the ’04 level, and $2.24 billion over the Administration’s request for 2005; However, the Committee did reiterate it is “very concerned that the section 8 program is growing at a cost that is undermining its financial stability as well as undermining the amount of funds that are available for other programs within this bill.”
HUD was directed to “review the mechanism used for determinig section 8 rents and the accountability requirements that ensure that these rents are reasonable and are no greater than the cost of comparable, unsubsidized units in the same market area.”
The bill retains a budget-based renewal formula for Section 8 vouchers.
Costs are capped at the “cost of vouchers in use as of October 1, 2004 with rent adjustments based on an annual adjustment factor determined by HUD which can be appealed by a landlord based on the cost of comparable unsubsidized units in the same census tract or a larger market area if appropriate. All rents would still be subject to a rent reasonableness test.”
S 2825 Provides a modest increase for HOME above last year’s funding level
The Committee provided $2.05 billion for 2005 – a $44 million increase above the “04 appropriation, but $34 million less than the Administration’s request
It Does not include cuts to Section 202 and Section 811
Section 202 received roughly $774 million – an increase of $72, 000 above the ’04 level, and $500,000 above the 2005 budget request. Of the total Section 202 funding:
$53 million is for service coordinators, up to $30 million can be used for assisted living conversion and for emergency capital repairs, $20 million is provided for the predevelopment grants (architectural and engineering work, site control, planning). Limited funds are provided for capital repairs of Section 202 properties. Section 811 received $250 million – $908,000 more than the 04 appropriation and $1.3 million above the 2005 budget request.
The Committee report also questions whether the project-based Section 8 contract administration saves money or improves resident services. Page 30 of the Committee Report states, “The Committee urges the Department to reconsider the decision to contract our Section 8 contract administration, and to conduct an appropriate benefit-cost analysis to determine whether the practice should be continued.”
Tax Issues
Although not directly related to housing issues, members may be interested to know the House and Senate have sent HR 1308, the Working Families Tax Relief Act to the President. The bill passed with a bipartisan vote of 339 to 65. According to a press release issued by House Majority Whip Roy Blunt (R-MO), the bill reduces taxes an average of $530 for 94 million taxpayers, and specifically:
The bill extends the following tax provisions through December 31, 2010:
- $1,000 child tax credit
- Marriage penalty relief
- 10% income tax bracket
Additionally, the bill:
- Extends individual AMT relief through the end of 2005
- Accelerates to 2004 the refundability of the child tax credit
- Includes combat pay in earned income for the purpose of the child tax credit and earned income credit
- Creates a uniform definition of a “qualifying child” for tax purposes
